The Central Bank has extended its buying spree in a market that remains optimistic about the changes introduced by the new government. After the DNU’s publication on the deregulation of the economy, the organization was able to discuss 269 million dollars in the foreign exchange market, the second highest score since the Milei era.
Since last Wednesday’s devaluation, the organization has already acquired 1,568 million dollars. The impact on reserves has not yet been felt: this Thursday they fell by $500 million in a single day for a total of $22,208 million, as reported by the BCRA.
The cause of this flight of dollars is to be found in the payment of the last deadline of the year with the Monetary Fund. Argentina faced payments of $920 million on Thursday, for which a CAF “bridge loan” was used.
Meanwhile, the foreign exchange market moved calmly. The official dollar rose 0.1% to close at $804.20. On the street, the blue dollar fell 5 dollars to 990 dollars, after President Javier Milei said that “It’s not illegal to buy in caves.”
In the financial sector, liquidity closed slightly lower, while the MEP dollar, or stock exchange, overheated: it rose almost 3% and closed at $971.88.
“The strong rejection of the Lede offers in yesterday’s auction – together with the lower rate limit – triggered the search for alternatives with the abundant liquidity in “orphan” pesos”, warned economist Gustavo Ber, who anticipated that Dollar financial institutions “may begin to reorganize after the weakness, as investors look to some tools to minimize the ‘liquefaction’ of accelerating inflation.”
Luis Caputo’s first debt tender went almost unnoticed due to the enormous impact the mega presidential decree had, but it will set the pace for the next wheels of the financial market. The Minister of Economy entered the field with three letters: one with a fixed rate (the 28-day Lede) and two bonds with a variable rate, linked to long-term inflation.
The market’s expectation was that Caputo’s Lede would pay a higher installment than the fixed one, which had been cut at the beginning of the week. However, excess demand meant that the cap rate was much lower and the minister went into debt for a month at the rate of 8.9% per month.
“It will be interesting to be able to observe where the pesos will migrate, not only the rest of those who have gone in search of an attractive rate, but also where the market will seek coverage,” they indicated in Delphos.
In the equity segment, the Merval recorded a strong increase after the DNU. Government bonds in dollars also advanced and the country risk dropped to 1,860 points.
Source: Clarin
